SMALL BUSINESS GUEST BLOG -- JOETTA HUMPHREY

Spring cleaning for your file cabinet

JOETTA HUMPHREYJoetta Humphrey, FPC is the General Manager/HR Administrator at Paytime Payroll Processing, an integrated payroll service provider located in Solon, Ohio.

While this is the time of year people get the urge to purge, it is also an opportune time for business owners to do a little spring cleaning in the payroll filing department. Before the weather breaks, take a little time to conduct your own cleanup of records and documents. Rummage through those that should be put away and those that should be tossed. As you are doing this, be aware that there are federal recordkeeping requirements as well as individual state requirements that must be followed.

In Ohio, payroll records / time sheets or cards should be kept a minimum of five years as a general rule. Many federal laws only require a period of three years for record retention. The laws that mandate this general length of time also depends upon the number of employees on your payroll. The following federal laws are to be taken into consideration when it comes to determining which records should be kept:

• Lilly Ledbetter – applies to one or more employee (While there are no retention requirements under Lilly Ledbetter, it is recommended that employers retain records for length of employment, plus an additional 5 years.)

• Compensation records: Amounts and dates of actual payment; Basis and rate of wages paid; Straight time and overtime hours/pay; additions to or deductions from wages; total wages paid each pay period; Date of payment and the pay period covered by the payment; annuity and pension payments; fringe benefits paid; tip reporting records

• Time / Date: Workweek beginning (Time and day of week); total hours worked each day and workweek

The above relate directly to the retention of payroll information. There are a number of other federal laws that require additional forms be kept on file. Visit the federal record retention guidelines document for a complete list.

As for the documents that have met the retention time frames, create a shredding log as a best practice measure. It's good documentation that ensures you have eliminated the possibility of accidentally releasing or misplacing sensitive information.

Start this spring off on the right foot by eliminating unnecessary wasted space in the filing cabinet. To really clean up your act, move all of the above into an encrypted digital storage space. It's a lot of sensitive data that demands safekeeping, but there are plenty of safe, electronic options that allow you to search, store, and re-print your records when and if necessary. Not sure what to do with all that extra space after clearing out the clutter in the corner of the office? What about one of those mini putting greens to get you ready for your swing this season?

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